Rightsizing U.S. Mission Iraq

Special Briefing

Thomas NidesDeputy Secretary for Management and Resources

Via Teleconference

Washington, DC

February 8, 2012

MS. NULAND: Thank you, Operator, and thanks to all of you for joining us. We are pleased today to have with us Deputy Secretary of State Tom Nides to talk on the record about a review that he is conducting for the Secretary on rightsizing the U.S. mission in Iraq.

Let me, without further ado, turn it over to the Deputy, and then we’ll take about three or four questions. Unfortunately, his time is a little compressed. Go ahead, Mr. Deputy Secretary.

DEPUTY SECRETARY NIDES: Hi. Thank you all very much. I just wanted to touch on a couple of facts as it regards to Iraq and what we’re planning to do and what we planned to do when we started the mission. As you know, we had the largest transition since the Marshall Plan taking place as of January 1st, and I think many folks thought that it was a difficult mission set and we – I think arguably – could suggest we’ve had a very successful mission.

We – the military is now gone. We have a robust diplomatic presence. We have a diplomatic presence both in up north and down south and in Baghdad. We have been fully and completely engaged on the – all of the political aspects, which you all have been covering quite clearly. And Jim Jeffrey, in particular, I want to give enormous credit to of being fully engaged at all levels of the Iraqi political situation. We have stood up a robust police-training program, which is doing a terrific job working with the local police in training and developing a program, which I think will pay enormous dividends, too. We’re working on economic development, because as you know, they’re producing almost a million two barrels a day out of Basrah. And we’re working with the IO community to make sure that that, as well as all the other economic development all over the country – we have economic officers accomplishing that.

We have, the probably the most sophisticated OSC-I site, which we’re working with – or OSC-I sites – which we’re working with the military. As you know, the Iraqis have been purchasing tens of millions of dollars of equipment from us, and they will be continuing to do that. We’re training the Iraqis on that equipment, and that is U.S. equipment which they’re purchasing.

And as I’ve pointed out at the beginning is, we’re fully and completely engaged on the political deployment. And with that – knock on wood – we’re doing this, with the first and foremost, the security of our people. It’s certainly still a complicated situation there, but to the credit of our security and our diplomats and our locally engaged employees – knock on wood – we’re doing a better than fine job at accomplishing the goals that we set out.

That said, when we put this mission set up, it was very clear to us that we were going to make sure that over time – and what I mean by over time meaning over this year – we begin to try to right size the Embassy to look at – like so – there’s never such a thing as a normal embassy, but a more normalized embassy presence. And principally, our goal has been to shift our reliance on contractors to basically hiring local Iraqis. This is what the Iraqis want, and quite frankly, that’s what we want because it’s cheaper, it’s more important to be part of the community. And so first and foremost, our goal has always been to, over this year, is to shift more and more of our purchasing, and quite frankly, just our whole operations more to local – locally hired individuals. So that is our first priority, with the understanding that our main priority is making sure our people are secure.

So number one, we’re going to be looking at how we can do that over the next year. We’ll continue to look at our footprint, which is something we’ll always do. And we’re meeting with folks on a daily basis, along with my colleague Pat Kennedy and his team, to make sure that our footprint is appropriate for the period of time as we proceed. We’ll be looking at the – as we look at the programs that we’re offering, most of the programs that we’re offering will continue to be offered. But we’ll continue to look at how we can hire like we do in many countries around the world, that we hire Iraqis to help us with the programs that we’re executing. So I am – we’re doing exactly what we said we were going to do when we set up this mission set, which is we’re going to constantly continue to look to ways to shift more of the cost structure to

locally, which is going to be, obviously, substantially cheaper for us, but most importantly, to continue evaluating it as this mission set is accomplished and is being accomplished.

So I am – feel quite good about where we are. I will tell you, contrary to some of the news reports, we are not reducing our operations by 50 percent. But I will hope – quite frankly, I am hopeful that over the next few months that we’ll be able to reduce our size by, again, reducing the dependency on contractors, by focusing on the things that we said we were going to focus on. But that is – quite frankly, I think we owe it to our – the taxpayers. We owe it to the men and women who are working there. We owe it to all the men and women who have spent time there. And quite frankly, that’s what a good bilateral relationship will do.

So I am quite pleased as we are proceeding here, and I think we’ll have more opportunity in the next few weeks to continue to brief you about how our planning is going. But I should tell you, it’s going to be a process that we’ll go through over the next few months about how we do this plan and continue to do the planning in Iraq.

So why don’t I pause and take a couple questions.

MS. NULAND: Thanks, Operator. We’re ready to go to questions.

OPERATOR: Thank you. And at this time, if you do have questions, please press * followed by 1 on your touchtone phone. If you would like to remove your question, that is *2. Again, *1 for any questions or comments. One moment for that, please.

I am currently showing no questions. Again, that is *1 on your touchtone phone for any questions or comments.

DEPUTY SECRETARY NIDES: Boy, I must have been really good.

OPERATOR: I do have a question from Karen DeYoung. Ma’am.

QUESTION: Hi, Tom.

DEPUTY SECRETARY NIDES: Hi.

QUESTION: You said it won’t be 50 percent, but have you come up with any sense of what it would be? And do you see Iraqis actually taking over security functions, whether static or movement security or any kind of security?

DEPUTY SECRETARY NIDES: I would – to be honest with you, I don’t know where the 50 percent number came from. But I am – it is what it is. But I think that the – I don’t know what the number is. What I – here’s the direction I gave people, okay? We made a commitment to try to reduce the dependency on contractors. There’s been a lot of press written about how many contractors we had. Much of that is security, but its food service, right? If I can get food purchasing – more food purchasing done in Iraq and not have to bring it in, that will dramatically decrease our dependency on contractors to do food service. And that goes through a lot of the service that we are providing now.

So my view of this is we will also look aggressively on perimeter security and how we manage that. But I should be honest with you, Karen. My – the only thing I worry about – the only thing I worry about is the security of our people. Okay? We have a diplomatic mission. We owe it to make sure that we fulfill the diplomatic mission that we set out to do when we made this transition. But the most important thing to do is to make sure that we are making sure that we have – our people are secure. And so I – as much as I would love to reduce – continue to reduce the numbers of people and the cost, I will not sacrifice the security of our people.

That said, I think as we go through this year, we’re going to see many, many opportunities to allow us to have a – the footprint that we can accomplish the goals around economic development and the OSC-I and the police training, the political engagement, with hopefully some fewer people and then also a lesser dependency on the contractors, which I think we all want to do. And we’ll do that. And it will take – it’s going to take time.

And what we’re not going to do is make kind of knee-jerk decisions. This has to be – there was several years of planning goes into these as the Embassy was stood up, and we will be very thoughtful as we begin moving – transitioning this is into a more – what I refer to as a normal-looking embassy. But that will take time, and so we’re going to be doing this very thoughtfully, and in consultation with the Congress, I mind you. I will have many conversations with the Congress, which we’re doing. And they get it. I mean, they totally understand what we’re trying to do.

MS. NULAND: Operator, next question.

OPERATOR: Thank you. Our next question comes from Steven Myers of The New York Times. Your line is open.

QUESTION: Hi, Tom and Victoria.

DEPUTY SECRETARY NIDES: Hey, buddy.

QUESTION: The – two questions, which are related: Why is this review happening now as opposed to over the last year when you knew this was coming? Even on the question of buying local food, for example, that could have been done years ago, but it wasn’t. And now you’re looking at it, so I wonder why.

DEPUTY SECRETARY NIDES: Well, I mean --

QUESTION: If I can just ask my second, because it’s related: The Iraqis have put up a lot of obstacles, some small but some rather significant, on movements, on visas. They’ve complained about the size of the security footprint. How much of the Iraqi obstructionism is causing you to rethink the number of people that you have there as well?

DEPUTY SECRETARY NIDES: Okay. Well, let me answer the first question. The first one’s a good question. I mean – and I should say let’s just step back and remind us where we were, okay? A year ago, we had almost 40-50,000 American troops there, okay? The military was the – was predominately the way we got around. It was certainly a major part of our presence, if not the greater preponderance of our presence, and all of our – much of our diplomatic presence was dependent upon everything from how we were fed and our medical care and all those activities, right?

So as we made the largest transition – again, I hate to use this line, but I’ll use it anyways again – since the Marshall Plan, our decision was – which was rightly so – is that we’re going to have to stand this mission set up. Because remember, we set a hard deadline to have those troops gone. So we knew that – starting January 1st – that we were going to have to have a mission set up to basically allow us to do exactly what our mission was, which is the diplomacy, the political engagement, the police training. And so our goal was – at that point was to make sure we had a mission that’s set up.

We always said – if you go and talk to Senator Leahy or you talk to Kay Granger, I was very clear that this was going to be – we’re going to do this in stages. You and I had this conversation. We were going to basically have a glide path, which was we would do – like on police training, our original police training program had us this year – our original plan was to do a billion dollar police training, and we started the plan – the training with a half a billion dollar program, because we want to see how these programs work. And as I said to everyone on the Hill, we are going to stand this mission set up because it’s critically important as we get those – we get the military out that we have a very strong diplomatic presence and we don’t have any gaps between the military and our diplomatic presence.

But that said, I – we have been totally upfront and straight about this, that over time we want to have a more normalized embassy, and that will mean making a decision over time about contractors, the numbers of contractors, the size of some of our mission sets, without losing sight of our core mission, which is, number one, political engagement, economic development, kind of the – and then this – and then the OSC-I piece of this, which is very, very important as they purchase U.S. equipment.

So I – again, I’m – one thing about what we have said and certainly what I’ve said and I think our team has said is we were very clear with everyone what we were planning to do and how we will execute this over. And this is not going to happen overnight. I mean, we’re not going to have – tomorrow, we’re not going to be able to sit here and say okay, X numbers of – hundreds of thousands of people have departed. We’re going to be doing this over a period of time as we think about how this mission set should look like, and quite frankly, as we procure more goods and as we operate more.

Now, on your second question, I – we’ve had an unbelievable cooperation from the Iraqis, okay? Listen, is it always perfect? No. I’m sure it’s not always perfect. It’s not always perfect. And I’m sure they don’t think we’re always perfect. But the reality is, is they’ve given us the visas that we’ve needed. It hasn’t been always smooth, but we’ve been given the visas. We’ve set up an operation in Iraq which allows our diplomats to be safe, allows us to do political engagement, it allows us to have an OSC-I site that are training people on military equipment which they’re purchasing from us.

So I’d have to say, as cynical as all of us are – and I think most of us are pretty cynical – pretty darn good, I mean, if you ask us come January 30 – January or February 6th where we are today. So I think you all would be questioning us if you weren’t asking us a question, “Well, what are you guys going to do over the long term? What is your long-term view of how big your footprint should be? How much should you be relying up on local contractors?” So we’re asking the tough questions. We’re going to continue asking the tough questions. And we’re going to, over time, allow ourselves to have this Embassy look like – more like a normal embassy, but it will take time without compromising our core missions.

MS. NULAND: And for those of you who aren’t wonked up on Iraq, Office of Security Cooperation is what OSC-I is.

We have time for one last question, Operator. Thank you.

OPERATOR: Thank you. And I have a question from Matthew Lee from the Associated Press. Your line is open.

QUESTION: Yeah. Hi.

DEPUTY SECRETARY NIDES: Hi.

QUESTION: Thanks. You say that you’ve been very clear about this with everybody, but apparently not, because that’s why this 50 percent number is floating around – I presume – that’s floating around in Baghdad. And whether or not it’s true or not, I’m wondering if it isn’t, in fact, the case if you are simply getting rid of the expensive contractors and replacing them with local contractors. While I see a reduction in cost, I don’t see a net reduction in contractors.

DEPUTY SECRETARY NIDES: Oh, well that – yeah. Listen, we’re not there to make – I mean, listen. We will go – we’ll go contractor by contractor, we’ll try to figure out over time what goods we can purchase locally in which we will not rely upon goods that are coming in over the border.

But I think the more – which – and I certainly appreciate the question – I think you also should recognize the fact we were spending last year almost $50 billion through DOD, and we’re now spending approximately $5.5 billion or – I mean, correct my numbers, but in that ballpark, right? For the taxpayers, okay, they’ve had a very positive gain. Okay? That said, I think most of us would agree that the – if you look at what’s happened in Iraq over the last month and a half, our political engagement there has been at the top end of the scale. The engagement of Jim Jeffrey and Hillary Clinton and Joe Biden and Barack – President Obama and all the players have been very strong and has been really done by the strength of our diplomatic presence there.

But listen, I think the reality is, as I said at the onset, my hope is that as we go through this next year, I’ll be having conversations which you’ll say, listen, we had X thousands of contractors. We have Y now because we are procuring more of our goods in Iraq, or we have concluded that we – the footprint that we currently have, we can have a smaller footprint. We don’t need as big a footprint. So consequently, we don’t need as many, quote, “static guards.” I mean, that’s what every good operation does. We should be – you – people should be pushing us all the time to continue to evaluate over the next couple years, which we will be doing.

Our goal has been, quite frankly, upfront, which is we will continue to look at this – the mission set to make sure that we do not compromise on our core responsibilities, which is, number one, the security of our people. So regardless of what the size is, we are going to make sure that the people there – our diplomats and our – and the people that we have hired there are secure, number one, and two, that the ability for us to be involved in the political engagement of Iraq is at the highest possible level because there’s – clearly, as you all know, there’s – this is as important a diplomatic mission that we have anywhere in the world. The stakes are high, and we plan to be engaged. So --

QUESTION: I understand that, but what I’m getting at is that barring – or unless – until there is development, until the circumstances allow for a dramatic reduction in, say, security guards, the security footprint, if you are just getting rid of the expensive contractors and hiring local people at less cost, isn’t it possible that there won’t be that significant a reduction in the number of personnel at all, at least until we get to the point where there doesn’t have to be that many – where there doesn’t --

DEPUTY SECRETARY NIDES: I mean, Matt, my – the way I’d answer the question is: I mean, having spent a lot of time in the business world as well, so I guess I’m somewhat uniquely qualified since I’ve had – I’ve done this a few times – there’s a variety of ways to do this, right? One is, obviously, the numbers of people that are working on different programs. And again, I go back to this notion that we want to make sure we have enough people to do the programs that we believe are critically important. The second way to make sure that you are smart about it is the numbers of locations you have, right? The amount of space you have, because obviously, the number of, quote, “security guards” you’re talking about is a total derivative of how many square feet we have, right? I mean, how many locations you have, because you have to obviously protect the perimeters of those.

So as we proceed over the next year, and as we look at our mission set and look at what we’re trying to achieve on the diplomatic side, my hope is, is that we’ll conclude over – in the period of time that we can consolidate some of the locations and space, and that will allow us to rely more upon local Iraqi contractors. But the most important thing is what we’re going to do is we’re going to be studying it, we’re working on it, we’re going to work very closely with our staff at our – in Baghdad and around the country, and we’re going to work with the Iraqis. They – we are a team working closely with them as we look at this diplomatic mission now and into the future.

So guys, I’ve got to run. But thank you all. And if I can be of any other help, I’m sure you’ll let us know.

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